What's behind Minnesota's bad January jobs report
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The Twin Cities metro lost 2,000 jobs in January, a development that a top state official partly blamed on the federal immigration crackdown.
Why it matters: The latest Minnesota jobs report shows that the state is losing ground, with 4.4% unemployment, topping the national rate (4.3%) for the first time since May 2007.
Between the lines: Department of Employment and Economic Development (DEED) commissioner Matt Varilek noted that changes in metro unemployment typically track with unemployment in Greater Minnesota.
- But the January report shows that the metro lost jobs while outstate gained, suggesting that Operation Metro Surge — which was heavier in the Twin Cities — dealt a blow to the labor market, Varilek said.
What they're saying: "While we can't say that there was one and only one factor, it seems entirely possible to me that the ICE actions influenced our January numbers in a very negative way," said Varilek, who also pointed to tariffs and other national economic headwinds.
The other side: Minnesota Business Partnership CEO Kurt Zellers said that while the surge could have had a minor effect, slow job growth is a sustained pattern here.
- "Elected leaders need to seriously reflect on whether the policies they are enacting are making Minnesota more competitive and attractive for businesses and employees alike, or costing our state jobs. Today's data sadly suggests it's the latter."
Zoom out: After years of ranking among the states with the lowest unemployment, Minnesota has been underperforming the nation over the last 18 months, University of St. Thomas economics professor Tyler Schipper told Axios.
- He attributed the trend to a more regional issue: Midwestern states aren't growing their populations like other parts of the country.
- "We just haven't added jobs as quickly as other places have in the country. And now we've slid to the middle of the pack."
Zoom in: Statewide, job growth was flat in January. The private sector lost 900 jobs while the public sector added 1,000.
- The biggest gains were in educational and health services (5,000 jobs) and construction (3,700).
- Leisure and hospitality lost 4,000 jobs, the most of any supersector, followed by trade, transportation and utilities, as well as financial activities.
What we're watching: Since DEED is playing catch-up on jobs data following last year's government shutdown, February and March jobs reports are due out on April 16 and April 30, respectively.
- "I remain optimistic about the prospects for growth once some of these headwinds fade," Varilek said.
- Schipper said the Trump administration's crackdown on immigration — even before the winter surge — will continue to hurt Minnesota, which relies on international immigration for labor more than other states.